Marketing Exam 1
performed by individuals and organizations
- manufacturers - retailers - wholesalers - people
EXCHANGE
- marketing entails an exchange -- trade things of value (money, time, effort)
satisfying customers needs or wants
- must understand need - segment total market into *target market*
Are people rational?
- no - complex - think about crowded restaurant example
The Consumer Buying Process KEY POINTS
- not spontaneous - marketers job is to FUEL the buying process
Evaluating Alternatives
- often during step TWO - NOT for habitual purchases - use "aids" to help the evaluation - EXPLAIN IMAGE
Need Recognition
- recognize need - desire to satisfy - greater discrepancy, greater urgency -- Functional Needs v Psychological Needs
Search for Info
- searching for options to satisfy - length/ intensity of search based on RISK - greater risk= longer search --internal v external
Develop and Implement Action Plan
• Starts with research summary of findings • Requires support by leadership (most smart companies will get CEO backing before researching)
Value-Based Marketing
•More than just creating what people want and need •Need to create VALUE •What is Value???
Situational Factors
•Purchase Situation •Shopping Situation •Temporal State
Sales Orientation
(1920s-1950s) - Great Depression and WWII lowered demand, so companies relied on heavy personal selling and ads to spike demand
Market Orientation
(Post WW2) • Soldiers return home • Switch from war material to consumer goods • Shopping centers • Choices • quality, convenience, price •Focus on needs before designing products - birth of marketing
Marketing Mix or 4 Ps
*Product, Price, Place, Promotion* 1. Product: create value or product/service/idea... needs to be a solution to a problem 2. Price: capture value... anything buyer gives up in exchange for product (not always money) KEY: how much to maximize profit 3. Place: deliver value... All the activities necessary to get product to the right customer when they want it... minimize cost, maximize service 4. Promotion: communicate value... Communication that informs, persuades and reminds buyers to influence opinion and elicit a response
Focus on Research Depends on Stage
- Before creating product - estimate needs of Target Market - Beginning of sales - how to generate hype - Established in market - how to improve product performance - End of lifecycle - where to take product in future
Collecting the Data
- Data comes from either Secondary or Primary sources - Secondary Data - already existing data collected for other reasons - Primary Data - data collected specifically as part of your research
Extended v Limited Problem Solving
- Extended - Recognizes unsatisfied need, seeks info, conducts research, visits stores, then buys - Limited - Prior experience with product and perceived risk is low -- Impulse buy -- Habitual buy
Technological Advances
- Fundamentally changing how products and services are communicated, delivered, evaluated, purchased, etc...
Product Orientation
- Manufacturers concerned with product innovation, not satisfying individual customer needs - retailers typically warehouse
Attribute Set Aids
- Need Evaluative Criteria - important attributes of product - Determinant Attributes - features important to decision which are perceived to be different among choices - important criteria equal across choices, so look for something special
Purchase and Consumption
- Once eval of alternatives done, consumer is ready to buy - But, doesn't mean you always buy - Conversion Rate - how well you convert purchase intention into actual purchase
Consumer Decision Rules
- Used consciously or unconsciously - Compensatory Decision Rules - good characteristics offset bad - Non-compensatory Decision Rules - choice based on 1 or set of characteristics regardless of how you rate the others
affects various stakeholders
- buyers - WHO ELSE
marketing analytics
- collect data - build relationship - CRM example
core aspects of marketing
- create value - satisfy needs/wants - entails an exchange - requires 4 Ps - affects various stakeholders - preformed by individuals or organizations
Marketing is...
- creating something of value - communicating that value - delivering that value - exchanging consideration for that value
Design the Research
- identify type of data needed and the tools necessary to collect it - surveys, observational studies, etc
Culture
- influences what, where, why, how & when we buy - Challenge is to have P/S identifiable by and relevant to a particular group
Elevator pitch
-who you are -what you do - WHY you would be a perfect fit - be prepared-- should be able to reel it off at anytime
Steps to Perfect Elevator Pitch
1. Clarify your Vision - your WHY and WHAT-- your PASSION and your GIFTS 2. Distill it Down - write everything down that you want prospect to know - strike everything that isn't critical to pitch - get down to THREE - GOAL= interest listener into learning MORE 3. Answer the Question - Who you are-- your why - What do you do - What are you looking for 4. Solve a Problem - can this person help me 5. Be Conversational - be authentic - avoid jargon 6. Practice - in front of mirror, friends, family, REPEAT 7. Variety - prepare a few variations 8. Joy - prepare it with JOY
Macroenvironment
1. Culture 2. Demographics 3. Social Trends 4. Technological Advances 5. Economic Situation 6.
Market Research Tools (5 Steps)
1. Define the Objectives 2. Design the Research 3. Collecting the Data 4. Analyze Data and Develop Insights 5. Develop and Implement Action Plan
Demographics
1. Generational-- generational cohorts have similar purchase behaviors because they have shared experiences -- if an event doesn't change you, it is not part of your generation-- birth years don't define generations, BEHAVIORS DO - generations are CHANGING-- used to be that companies would try to understand and tailor needs to new generations-- NOW: iGen is driving change to older generations -- IMPACT: Greatest predictor of the future of older generations is what the younger generations are doing/// iGen will significantly impact companies 2. Income-- disposable income creates marketing opportunities// ex: Walmart successfully markets to low/middle income 3. Education-- educated consumers have different buying interests 4. Gender-- because the roles are blurring between genders, the long held beliefs about who buys what are CHANGING 5. Ethnicity-- US become more diverse// 80% of population growth in next 20 years from African American, Hispanic and Asian - US population is 60% non-Hispanic white, so brands will need to expand marketing activities to multi-cultural segments to keep large market share
Social Trends
1. Health and Wellness - guiding how food is advertised - internet creating new opportunities for apparel, food, lifestyle (ex: protein coffee, kombucha, grass-fed meats) 2. Green Movement - Green Marketing-- enviro-friendly, sustainable products - Greenwashing-- disingenuously marketing products are enviro-friendly 3. Privacy - cookie data - states are proposing laws about consumer data (CA can't use data for 16 and under)
Consumer Decision Process
1. Need Recognition 2. Information Search 3. Alternative Evaluation 4. Purchase 5. Post Purchase
Primary Data Techniques
1. Observation - examining purchase consumption and behavior - helpful when subject unable to articulate experiences - best way to determine HOW customer uses product 2. Social Media - users aren't shy about posting opinions - firms are watching - hire staff to monitor channels 3. In-Depth Interviews - trained researcher - expensive and time consuming 4. Focus Groups - usually 8-12 people - highly trained facilitator - unstructured questions - people don't always reveal true feelings 5. Surveys - questionnaires - most popular method - part art, part science - familiar language 6. Pannel and Scanner - send out periodic survey to participants 7. Experiments - Manipulate one or more variables to determine which variable have a casual effect on other variables
Risks Involved
1. Performance- will it work 2. Financial- was it worth it 3. Social- judged by others 4. Safety- was this safe 5. Psychological- ??
psychological factors
1. motives-- need or want strong enough to cause person to seek satisfaction// Maslow's hierarchy of needs 2. attitudes-- person's enduring evaluation of his/her feelings about & behavioral tendencies toward an object or idea// learned or lasting// attitudes influence our decisions - Cognitive - what we believe true - Affective - what we feel about issue - Behavioral - actions we take based on 1 & 2 --- Cognitive Dissonance - incongruence among 3 attitude components --- Marketers can change attitudes 3. Perception-- Process by which we select, organize & interpret info to form a meaningful picture of the world // influences consumption based on out tendency to assign meaning to things such as color, taste, etc... 4. Learning-- change in thoughts based on experiences// learning affects attitudes and perceptions 5. Lifestyle-- the way we spend our time and money// does product fit with our actual/ perceived lifestyle
Strategies for top of funnel
Awareness - prospect looking for answers - may not know they have a problem - 81% search online - your job= EDUCATE - blogs, ebooks, videos - EMAIL
What elements make up the environment
Center= Customer Immediate Environment= Company, Competition, Partners Macroenvironment= Culture • Demographics • Social • Technology • Economic • Political/Legal
Strategies for Middle of Funnel
Consideration - introduce your solution - show if you're a good fit or no - build relationship of trust - build brand image as expert - webinars, live interactions, demos, etc
Political/ Regulatory
False ads, users loans, informed consent
Economic Situation
Inflation, exchange rates, interest rates
Locus of Control
Internal-- I control outcome External-- outside forces control outcome (never to blame)
Simon Sinek: Start with Why
PURPOSE!!! *"People don't buy what you do, they buy why you do it"*
Evolution of Marketing
Product Orientation Sales Orientation Market Orientation Value-Based Marketing
Strategies for Bottom of Funnel
Purchase - prospect ready to spend but not necessarily with you - content is final nudge, call to action - case studies, trial offers, demos
marketing research
Systematic collection and analysis of information in order to help a company make intelligent decisions - MR never exists in a vacuum - Stems from being driven to improve - Research happens in endless ways - Solutions don't have to be "genius"
Involvement is
The consumer's degree of interest in product • 2 types of buying decisions: -- Extended Problem Solving -- Limited Problem Solving
Primary Data
information collected for the specific purpose at hand - qualitative v quantitative - qualitative: open-ended, broad-based, used for refinement, more informal - quantitative: done AFTER qual, structured responses, statistically tested, confirm hypothesis
Define the Objectives
What problem needs to be solved?
secondary data
information that already exists somewhere, having been collected for another purpose - MR ALWAYS BEGINS WITH SD - ex: census - types: syndicated, scanner, pannel, internal
Post Purchase
Why are marketers interested? -- Chance to interact with actual rather than potential customers -- Satisfied customers buy again A. Customer Satisfaction-- don't set expectations too high, encourage feedback, reach out to customer periodically B. Cognitive Dissonance-- internal conflict arising from inconsistency between two beliefs or between belief and behavior// likely for expensive, infrequently purchase or high-risk purchases C. Consumer Loyalty-- try to solidify loyal relationship so won't consider other brands
Ways to monitor the environment
Your sales staff Your marketing staff Your employees Your customers Market Research News, culture, society awareness
Perceived Benefit vs Perceived Risk
is it worth it
Immediate Environment
company capabilities - focus on satisfying customer needs to support your core competency competitors - must understand the strengths and weaknesses of competitors - Likely reaction??? corporate partners - firms supplying company ultimately impact customer
Social Factors
family, reference groups, culture
Factors Influencing the Consumer Decision Process
psychological factors, social factors, situational factors
Analyze Data and Develop Insights
statistical measures, heat mapping